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Videoconferencing Demand Peaks In WTC Wake,12/21/01

(IDG) — Preliminary estimates reveal sales of video conferencing equipment and services are expected to rise between 25 percent and 30 percent in the next few months, according to analysts.

Service providers will also feel an immediate ripple, according to Frost & Sullivan, a market consulting company in San Jose, Calif., which estimates video conferencing call volumes will jump between 30 percent and 50 percent.

Videoconferencing and Web-based conferencing alternatives are quickly rising in popularity in corporate America in the wake of last week's terrorist attacks and continued concerns about the economy.

In addition, vendors are faring well in the stock markets. For example, shares in Milpitas, Calif.-based Polycom (PLCM) jumped more than 30 percent on Monday, and were at $24.52 by Wednesday midday.

"We believe that last week's tragic events have created a situation where videoconferencing offers a viable, cost-effective alternative to travel," said Roopam Jain, strategic analyst at Frost & Sullivan.

"Corporations will certainly take a closer look at videoconferencing, Web conferencing, and enhanced audio conferencing applications," Jain said.

Supporting these claims is an AT&T status report on telecom infrastructures in the New York area in which officials made reference to a spike in demand for video conferencing services.

Officials reported a 20 percent increase in the technology and noted its use by officials at the New York Stock Exchange (NYSE) both to prepare for Monday's market opening and to support crisis management needs.

"Conferencing in general is already a big part of our network, although it is not all video but audio as well," said Frank Ianna, president of AT&T Network Services in Basking Ridge, N.J.

Moreover, the shocking events of last week may result in a changed corporate culture more accepting of video meetings, according to Christine Perey, president of Perey Research in Placerville, Calif.

"The question that has been raised is about changing our behavior. Is it time for business people to change their meeting behavior? video conferencing saves time because you don't have to travel, it saves money, and increases the impact of communications. This changing behavior is not just about your pocketbook. It is around the acceptance of the technology like we accept e-mail," Perey said.

Another video conferencing user is energy industry equipment manufacturer GE Power Systems in Atlanta, which has used the technology for more than a decade to augment travel and improve worker productivity.

Mike McGary, GE Power Systems' global video communication leader, said although it is too early to speculate about increased usage of the systems and more acceptance, he has seen more interest in videoconferencing in the past week.

"Interest has been peaked. It may just simply be the raw facts that everyone is facing: [that] it is more painful to get tickets and go through the airports," McGary said.

Meanwhile, V-Span, a provider of video conferencing and other multimedia applications, reported a surge in the use and demand for video conferencing capabilities in the wake of the disaster.

Specifically, the company reports a 35 percent to 50 percent increase in corporate interest, said Ken Hayward, CEO of V-Span, in King of Prussia, Pa.

However, Hayward was careful to note that especially since he lost a close friend in the New York attack, his company is sensitive to the appearance that it is seeking success in the wake of disaster.

"What we saw last week and continue to see this week is an awakening of such to the role that travel plays in the business marketplace," he said.

Still, the outcry for alternatives to business travel will be high, he maintained. Hayward pointed to the fact that officials in many large companies, including Intel and Sun, have said travel bans will go in place at least for the near future.

"If you ask many CFOs, the policy was about to come out anyway because of the economy. But now you have the matter of safety for employees combined with the issue. The question then becomes, how can you maintain momentum and continue to build trust with employees and clients when faced with the issue that whatever you do must be done from here?" he said.

During the disasters, V-Span customers used the services in some cases to determine the whereabouts and well-being of employees. "We've heard very deep stories. One insurance company was using this to put insurance partners together to determine risk. It was used in emergency planning, especially in terms of telecom infrastructure," Hayward continued.

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